$67 Oil Drags Market Lower

123jump.com Staff
24 Aug, 2005
New York City

Another day another reason to take oil higher. Petroleum invetory report from the Energy Department suggested lower gasoline inventories and impendiing tropical storm in the Gulf of Mexico gave enough reasons to oil to trade higher than $67 per barrel. On earnings front BHP Billiton historic profit and revenue but cautioned that company will use capital for business growth than share with investors.

U.S. AVERAGES

Lower-than-expected durable orders for the factories and 3% jump in oil during the day put chill on the market in the last thirty minutes of trading. Weekly petroleum report from the Energy Department this morning showed a decline in gasoline inventories. The new home sales report this morning showed that home sales are on the rise and there is no sign of slow down in the market.

Needless to say housing and energy sector stocks showed strength in an otherwise a declining market across the board. The housing sector was up 2.4% and oil service sector was up 1.4%.
The gold sector is down 1.4% to its lowest level in more than 2 weeks. The airline sector recovered from its intra-day lows and closed off about 1%.

Google shares ((GOOG)) added 1% as the Internet search engine confirmed the launch of Google Talk, a downloadable Windows instant-messaging service early Wednesday. The company said the service would require a """"Gmail"""" e-mail account.

Autodesk ((ADSK)) hit a new 52-week high, while Edison International ((EIX)) has extended its gains after Lehman Brothers lifted its rating.

Blyth ((BTH)) plummeted to a new 52-week low on worse-than-expected earnings and disappointing guidance, while Rambus ((RMBS)) continued its downward movement from the recent months to record a new low.

Baidu.com fell about 5% Wednesday despite saying it sees sales to rising to $10 million in 3Q.

Applebee's International shares lost 6.3% after the nationwide restaurant chain lowered its earnings forecast for 3Q and 2005 as same-store sales growth slowed in August.

The cable company Charter Communications soared 27% after announcing it plans to exchange up to $8.4 billion in debt.

Data-management software provider Versant sank 5.2% after tumbling almost 50% in pre-market trading. The company's shareholders approved a 1-for-10 reverse stock split, effective Wednesday. Following the reverse split, there will be about 3.56 million shares outstanding.

SeaChange International lost 17% after slashing its revenue outlook and posting a 2Q loss as revenue fell 39%.

ECONOMIC NEWS

U.S. durable goods orders plummeted 4.9% in July, the first decline in four months, according to the Commerce Department report Wednesday morning. Economists had forecasted orders to decline 1.5% in July. Durable orders in June were downwardly revised to a 1.9% rise from a 2.8% increase previously expected.

Sales of new U.S. homes rose 6.5% in July to a record seasonally adjusted annual rate of 1.41 million, the Commerce Department reported Wednesday. Economists had been looking for sales to decline slightly to a 1.33 million pace in July.

Crude oil inventories climbed 1.8 million barrels vs. the previous week, beating forecasts for a decline of 100,000 barrels last week. At 322.9 million barrels, U.S. crude oil inventories are above the upper end of the average range for this time of year.

Total motor gasoline inventories declined by 3.2 million barrels last week, the bottom end of the average range. Analysts expected gasoline inventories to drop 1.1 million barrels, for the eighth week in a row on demand.

INTERNATIONAL MARKET NEWS

Asian markets ended higher as oil prices retreated from recent high levels. Tokyo's Nikkei-225 Index was up by 0.22% to 10,985.33, while Hong Kong's Hang Seng Stock Index gained 1.73% to 12,646.49. Korea's Kospi Index added 0.60% to 792.34, while Australia's All Ordinaries Index finished up 0.13% to 3539.70.

Tokyo closed higher Wednesday, reaching to a new four-year high for the third-straight session due to growing confidence in the country's economic recovery. The Nikkei 225 index added 0.24% percent, to 12,502.26 on the Tokyo Stock Exchange. The broader TOPIX gained 0.28% to 1,275.61.

European shares closed lower dragged down by weaker mining and metals stocks following results from BHP Billiton. At the close, the German DAX 30 shed 0.04% to 4915.95, while the French CAC-40 lost 0.3% at 4424.43. The U.K.'s FTSE-100 Index dropped 0.4% to 5279.6.

ENERGY, METALS AND CURRENCIES MARKETS

Crude-oil prices added $1.61 cents to $67.32 a barrel in New York Mercantile Exchange electronic trading Wednesday, ahead of a key U.S. oil-inventories report that is expected to record a decline in crude and gasoline stocks.

The dollar traded at 110.13 yen, up vs. 109.84 yen late Tuesday, while the euro advanced to $1.2272 vs. $1.2233.

The 10-year Treasury climbed 6/32, or $1.86 per $1,000 invested, to yield 4.163%. The 30-year bond rose 10/32 to yield 4.373%.

December gold declined $3.60 at $440.70 an ounce after reaching a two-week low of $440.50. Gold prices advanced $2 in the last two days and haven't witnessed such low levels since Aug. 10.

September silver lost 1%, at $6.90 an ounce after reaching its 7-weeks low.

EARNINGS NEWS

John. B. Sanfilippo & Son Inc. ((JBSS)), nut marketer and distributor, posted 4Q net income of 32 cents a share, unchanged from the same quarter a year ago. Net income for the 12 months ended June 30 declined to $14.5 million vs. $22.6 million. 4Q sales advanced to $144.1 million, and 2005 sales climbed to $581.7 million.

Consolidated Communications Holdings, Inc. ((CNSL)) swung to a 2Q net income of $2.7 million vs. a loss of $4.1 million last year. Revenue for the period increased to $78.3 million vs. $72.5 million a year earlier.

Longview Fibre Co. ((LFB)), paper and container manufacturer, said 3Q profit slid to 11 cents a share vs. 15 cents a share last year, disappointing estimates of 16 cents. Sales rose 2% to $224.9 million.

Regis, hair care producer, reported 4Q net income of 64 cents per share, up vs. 58 cents per share for the same time last year on 17% consolidated revenue growth and a 0.9 % rise in same-store sales.

Telekom Austria, telecommunications provider, reported 2Q earnings of 39 eurocents, compared with 21 eurocents in the comparable period last year on revenue growth in the wireless business segment, mainly due to foreign operations, higher subscribers and strong data business.

BHP Billiton, Anglo-Australian resources group, reported record full-year net profit of US$6.398 billion, up 89.3 %t from US$3.379 billion a year ago on strong demand from China and high prices for its raw materials.

Genesco, specialty retailer, announced 2Q earnings increased to 27 cents a share vs. 20 cents a share for the year-ago period on strong sales, beating market expectations of 22 cents per share

Bombardier, aerospace company, posted 2Q earnings of 6 cents a share, up from a the same period last year’s profit of 5 cents per share despite revenue decline. Excluding items, the company earned 2 cents a share in July.
American Woodmark profit down but tops target

American Woodmark, kitchen cabinet maker and distributor, announced that 1Q profit went down to 45 cents a share, from 58 cents a year earlier, beating analysts forecasts of earnings within the range of 30 to 40 cents a share.

PetroChina announced its first-half net profit increased 36% and revenue went up 42% to 252.5 billion yuan from 178.4 billion yuan in the first half of last year. The said the earnings rise was due to ‘continued high crude-oil prices"""". PetroChina has recently reached an agreement to buy a major oil producer in Kazakhstan.

Dollar Tree Stores, discount retailer, reported that 2Q profit was down to 25 cents a share from 26 cents a year earlier despite sales increase, matching analyst estimate. Same-store sales decreased 1.5%.

Longview Fibre, paper and container manufacturer, announced that 3Q profit declined to 11 cents a share, from 15 cents a share for the same period last year, missing analysts’ forecast of 16 cents a share.

Brown-Forman, liquor company, posted 1Q earnings of 33 cents per share, down from or 42 cents per share, in the year-ago period despite sales growth on a heavy loss from the sale of its former Lenox Inc. china and crystal business.

CORPORATE NEWS

Northern Trust ((NTRS)) said that it has been chosen by Julius Baer Investments Ltd. to provide investment outsourcing solutions for about $4.5 billion in fixed income assets under management. The agreement is expected to be completed by the end of 2005.

News Corp. ((NWS)) plans to sell Sky Radio, Dutch radio broadcaster, according to reports. According to Rupert Murdoch, chairman and chief executive of News Corp., the popularity of digital music players is drawing listeners away from radio, making the long-term future of the medium uncertain.

Intel ((INTC)) said it designed a new generation of computer chips that should facilitate laptop PCs to function longer on their batteries, as well as help desktop users to save on power costs. Intel targets to start shipping these chips in the second half of the forthcoming year. The new chip would include features of Intel's Pentium 4 chip for desktops and servers and of the Pentium M chip used in notebooks, according to the company.

McDermott International, Inc. ((MDR)) announced that one of its subsidiaries has been awarded the installation contract for Chevron Corp.'s ((CVX)) Tahiti project in the gulf of Mexico. The contract terms weren't revealed.

MTC Technologies, Inc. ((MTCT)) has won a contract worth about $45 million to modify the Air National Guard and Air Reserve Command F-16 aircraft with a commercial fire control computer.